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Segment Information (Tables) | 6 Months Ended
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Jun. 30, 2018
Segment Reporting [Abstract] |
Real Estate Investments, Net Operating Income and Unconsolidated Real Estate Ventures of Reportable Segments | The following tables provide selected asset information and results of operations of the Company's reportable segments (in thousands):
Real estate investments, at cost: |  |  |  |  |  |  |  |
|  | June 30, 2018 |  |  | December 31, 2017 |
Philadelphia CBD |  | $ | 1,647,843 |  |  | $ | 1,643,296 |
Pennsylvania Suburbs |  |  | 979,720 |  |  |  | 958,796 |
Metropolitan Washington, D.C. |  |  | 979,573 |  |  |  | 978,257 |
Austin, Texas |  |  | 170,912 |  |  |  | 163,653 |
Other |  |  | 86,581 |  |  |  | 88,346 |
|  | $ | 3,864,629 |  |  | $ | 3,832,348 |
Corporate |  |  |  |  |  |  |  |
Construction-in-progress |  | $ | 120,593 |  |  | $ | 121,188 |
Land held for development (a) |  | $ | 95,658 |  |  | $ | 98,242 |
Prepaid leasehold interests in land held for development (b) |  | $ | 40,177 |  |  | $ | - |
(a) | As of June 30, 2018, the Company categorized 2.7 acres of land held for development, located in the Pennsylvania Suburbs segment, as held for sale in accordance with applicable accounting standards for long lived assets. As of December 31, 2017, the Company categorized 13.1 acres of land held for development, located in the Other segment, as held for sale in accordance with applicable accounting standards for long lived assets.
(b) | As of June 30, 2018, this caption comprised leasehold interests in prepaid 99-year ground leases at 3025 and 3001-3003 JFK Boulevard, in Philadelphia, Pennsylvania. See Note 3, “Real Estate Investments,” for further information.
Net operating income (in thousands):
| Three-month periods ended |
| June 30, |
| 2018 |  |  | 2017 |
| Total revenue |  |  | Operating expenses (a) |  |  | Net operating income (loss) |  |  | Total revenue |  |  | Operating expenses (a) |  |  | Net operating income (loss) |
Philadelphia CBD | $ | 63,524 |  |  | $ | (24,805 | ) |  | $ | 38,719 |  |  | $ | 54,451 |  |  | $ | (21,464 | ) |  | $ | 32,987 |
Pennsylvania Suburbs |  | 34,333 |  |  |  | (12,117 | ) |  |  | 22,216 |  |  |  | 35,157 |  |  |  | (11,240 | ) |  | $ | 23,917 |
Metropolitan Washington, D.C. |  | 23,199 |  |  |  | (8,392 | ) |  |  | 14,807 |  |  |  | 22,749 |  |  |  | (8,464 | ) |  | $ | 14,285 |
Austin, Texas |  | 8,469 |  |  |  | (3,395 | ) |  |  | 5,074 |  |  |  | 8,763 |  |  |  | (4,132 | ) |  | $ | 4,631 |
Other |  | 3,339 |  |  |  | (2,200 | ) |  |  | 1,139 |  |  |  | 4,160 |  |  |  | (2,580 | ) |  | $ | 1,580 |
Corporate |  | 922 |  |  |  | (1,638 | ) |  |  | (716 | ) |  |  | 2,511 |  |  |  | (2,738 | ) |  | $ | (227 | )
Operating properties | $ | 133,786 |  |  | $ | (52,547 | ) |  | $ | 81,239 |  |  | $ | 127,791 |  |  | $ | (50,618 | ) |  | $ | 77,173 |
| Six-month periods ended |
| June 30, |
| 2018 |  |  | 2017 |
| Total revenue |  |  | Operating expenses (a) |  |  | Net operating income (loss) |  |  | Total revenue |  |  | Operating expenses (a) |  |  | Net operating income |
Philadelphia CBD | $ | 126,126 |  |  | $ | (49,132 | ) |  | $ | 76,994 |  |  | $ | 108,900 |  |  | $ | (42,301 | ) |  | $ | 66,599 |
Pennsylvania Suburbs |  | 69,215 |  |  |  | (25,081 | ) |  |  | 44,134 |  |  |  | 70,812 |  |  |  | (23,824 | ) |  |  | 46,988 |
Metropolitan Washington, D.C. |  | 46,258 |  |  |  | (17,151 | ) |  |  | 29,107 |  |  |  | 46,111 |  |  |  | (17,847 | ) |  |  | 28,264 |
Austin, Texas |  | 16,833 |  |  |  | (6,918 | ) |  |  | 9,915 |  |  |  | 17,886 |  |  |  | (7,705 | ) |  |  | 10,181 |
Other |  | 9,480 |  |  |  | (7,165 | ) |  |  | 2,315 |  |  |  | 10,522 |  |  |  | (6,436 | ) |  |  | 4,086 |
Corporate |  | 2,232 |  |  |  | (3,604 | ) |  |  | (1,372 | ) |  |  | 4,480 |  |  |  | (3,586 | ) |  |  | 894 |
Operating properties | $ | 270,144 |  |  | $ | (109,051 | ) |  | $ | 161,093 |  |  | $ | 258,711 |  |  | $ | (101,699 | ) |  | $ | 157,012 |
(a) Includes property operating expenses, real estate taxes and third party management expense.
Unconsolidated real estate ventures (in thousands): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Investment in real estate ventures, at equity |  |  | Equity in income (loss) of real estate ventures |
| As of |  |  | Three-month periods ended June 30, |  |  | Six-month periods ended June 30, |
| June 30, 2018 |  |  | December 31, 2017 |  |  | 2018 |  |  | 2017 |  |  | 2018 |  |  | 2017 |
Philadelphia CBD | $ | 21,230 |  |  | $ | 39,939 |  |  | $ | 89 |  |  | $ | 45 |  |  | $ | (147 | ) |  | $ | (21 | )
Pennsylvania Suburbs |  | - |  |  |  | 3,503 |  |  |  | - |  |  |  | 148 |  |  |  | - |  |  |  | 424 |
Metropolitan Washington, D.C. |  | 119,678 |  |  |  | 119,817 |  |  |  | (363 | ) |  |  | (75 | ) |  |  | (400 | ) |  |  | 392 |
Austin, Texas |  | 14,684 |  |  |  | 13,973 |  |  |  | 653 |  |  |  | 1,646 |  |  |  | 734 |  |  |  | 1,281 |
MAP Venture (a) |  | 12,883 |  |  |  | 15,450 |  |  |  | (830 | ) |  |  | (787 | ) |  |  | (1,567 | ) |  |  | (1,904 | )
Other |  | 1,886 |  |  |  | 1,939 |  |  |  | 93 |  |  |  | 107 |  |  |  | 197 |  |  |  | 164 |
Total | $ | 170,361 |  |  | $ | 194,621 |  |  | $ | (358 | ) |  | $ | 1,084 |  |  | $ | (1,183 | ) |  | $ | 336 |
(a) | The MAP Venture represents a joint venture, formed on February 4, 2016 between the Company and MAP Ground Lease Holdings LLC, an affiliate of Och-Ziff Capital Management Group, LLC. The MAP Venture’s business operations, including properties in Richmond, Virginia; Metropolitan Washington, D.C.; New Jersey/Delaware and Pennsylvania Suburbs, are centrally managed with the results reported to management of the Company on a consolidated basis. As a result, the investment in the MAP Venture is separately presented. All other unconsolidated real estate ventures are managed consistently with the Company’s regional segments.
Reconciliation of Consolidated Net Income to Consolidated NOI | The following is a reconciliation of consolidated net income, as defined by GAAP, to consolidated NOI, (in thousands):
| Three-month periods ended June 30, |  |  | Six-month periods ended June 30, |
| 2018 |  |  | 2017 |  |  | 2018 |  |  | 2017 |
Net income | $ | 13,136 |  |  | $ | 7,698 |  |  | $ | 57,841 |  |  | $ | 28,969 |
Plus: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest expense |  | 19,301 |  |  |  | 20,304 |  |  |  | 38,834 |  |  |  | 41,741 |
Interest expense - amortization of deferred financing costs |  | 627 |  |  |  | 596 |  |  |  | 1,254 |  |  |  | 1,230 |
Depreciation and amortization |  | 43,717 |  |  |  | 44,263 |  |  |  | 87,008 |  |  |  | 90,155 |
General and administrative expenses |  | 7,523 |  |  |  | 6,659 |  |  |  | 16,246 |  |  |  | 15,984 |
Equity in (income) loss of Real Estate Ventures |  | 358 |  |  |  | (1,084 | ) |  |  | 1,183 |  |  |  | (336 | )
Provision for impairment |  | - |  |  |  | 327 |  |  |  | - |  |  |  | 3,057 |
Less: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest income |  | 641 |  |  |  | 163 |  |  |  | 1,344 |  |  |  | 556 |
Income tax (provision) benefit |  | (20 | ) |  |  | 339 |  |  |  | (158 | ) |  |  | 239 |
Net gain (loss) on disposition of real estate |  | (35 | ) |  |  | 1,088 |  |  |  | (35 | ) |  |  | 8,411 |
Net gain on sale of undepreciated real estate |  | 2,837 |  |  |  |  |  |  |  | 2,859 |  |  |  | - |
Net gain on Real Estate Venture transactions |  | - |  |  |  | - |  |  |  | 37,263 |  |  |  | 14,582 |
Consolidated net operating income | $ | 81,239 |  |  | $ | 77,173 |  |  | $ | 161,093 |  |  | $ | 157,012 |

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- Definition Tabular disclosure of the reconciliation of profit (loss) from reportable segments to the consolidated income (loss) before income tax expense (benefit) and discontinued operations. Includes, but is not limited to, reconciliation after income tax if income tax is allocated to the reportable segment. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=115929826&loc=d3e8924-108599 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 30 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=115929826&loc=d3e8906-108599 + Details
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- Definition Tabular disclosure of the profit or loss and total assets for each reportable segment. An entity discloses certain information on each reportable segment if the amounts (a) are included in the measure of segment profit or loss reviewed by the chief operating decision maker or (b) are otherwise regularly provided to the chief operating decision maker, even if not included in that measure of segment profit or loss. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI http://asc.fasb.org/extlink&oid=115929826&loc=d3e8736-108599 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 25 -URI http://asc.fasb.org/extlink&oid=115929826&loc=d3e8813-108599 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=108376223&loc=d3e13816-109267 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=115929826&loc=d3e8721-108599 Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=115929826&loc=d3e8906-108599 + Details
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